Biotech's future is boon for Texas seniors

By BY DAVID THOMASON
July 17, 2013 at 2:17 a.m.

A new report on the future of medical technology offers some good news for Texas seniors. Biotech firms around the country are currently at work on 460 different treatments for the ten chronic illnesses most common among Americans 65 and over. This unprecedented increase in medical innovation could soon generate remarkable new medications for diseases like diabetes and osteoporosis.

This biopharmaceutical revolution isn't coming to pass by chance. It's a product of policy choices that have encouraged medical discovery and protected seniors' access to treatment. Our policymakers need to ensure that this favorable environment for innovation continues through succeeding generations of breakthrough treatments.

Chronic illnesses have long been exacting a serious toll on seniors.

According to the Texas Department of State Health Services, about 23 percent of Texans aged 65 and older have been diagnosed with diabetes. Nearly one quarter of adult Texans suffer from arthritis. Deaths due to Alzheimer's disease are more common in our state than in the nation as a whole. And between 2005 and 2010, there were nearly 172,000 hospitalizations in Texas due to chronic obstructive pulmonary disease, another illness that disproportionately affects seniors.

Fortunately, recent developments in pharmaceutical laboratories around the country - including many here in Texas - are offering new hope. For Alzheimer's disease alone, scientists are currently testing 81 different potential treatments, some of which have already reached phase III trials, the final stage before approval.

For diabetes, 139 new medicines are under development. In the Woodlands, Lexicon Pharmaceuticals has a promising diabetes treatment in the pipeline, while Austin-based XBiotech is in the process of conducting phase II trials on another diabetes drug. For chronic heart disease, 40 treatments are in the works.

Unfortunately, in the name of cost-control, our leaders in Washington are currently considering several pieces of legislation that would seriously hamper biotech innovation going forward. Congress needs to say no to proposals that would save a few dollars now but cost lives later by halting work on the next generation of medical breakthroughs.

For starters, President Obama's 2014 budget includes a proposal for shortening the so-called data exclusivity period for certain biotech drugs. Today, biopharmaceutical firms enjoy twelve years of protection for the research they conduct on a new medicine. This rule gives a company time to make back its initial investment before competing firms can use its research data to develop similar products.

The administration has proposed reducing this period to a mere seven years in order to get cheaper copies on the market sooner. But given that it takes, on average, 10-15 years and over one billion dollars to create a new biotech drug, a reduction in the data exclusivity period to only seven years will undermine the incentive to invest in new research.

Congress is also considering changes to the Medicare Part D drug program that also would result in reduced investment in innovation. One would require drug firms to offer "rebates" to the government for medicines purchased for low-income seniors.

This change would hit most seniors right in the pocketbook as drug companies raise the prices they charge to other purchasers in order to recoup some of their losses. According to a former director of the Congressional Budget Office (CBO), Part D premiums would increase 20 to 40 percent under a rebate scheme.

Even worse, however, would be the negative effect on pharmaceutical innovation, as revenue losses would lead to fewer investment dollars. Meanwhile, the future uncertainty resulting from government flirtation with a system of price controls will encourage outside investors to look elsewhere. So much for tomorrow's cures.

Considering the extraordinary number of new treatments in the drug pipeline, this is precisely the wrong time to tamper with the incentive system that makes pharmaceutical research worthwhile. The changes currently under consideration are bad for seniors nationwide.

Dr. David Thomason is chairman of the Texas Senior Advocacy Coalition. He has worked for the Texas Legislature, the Arizona Legislature, and a member of the United States Congress. For the past 12 years, Dr. Thomason has worked on health policy and aging issues. He is the previous Senior Vice President of Public Policy for LeadingAge Texas and is the owner of Advocacy Gauge.